Minnesota Health Care Spending Increases Remain Low-For Now
St Paul, MN (KROC AM News) - A new report from the Minnesota Department of Health indicates growth in health care spending in the state remains at historically low levels.
The report is based on 2013 figures. It shows health care spending that year totaled nearly $41 billion, a 3.1 percent increase from 2012. That was the fourth lowest increase on record. The growth rates in 2010 and 2011 were 1.7 percent. The per-capita health care cost in 2013 was $7500.
Recent projections estimate that health care spending in Minnesota will grow nearly 8 percent per year and will double by 2023, reaching $85 billion. The Health Department says this is lower than the growth experienced for the 10-year period prior to the recession when the annual increase was 8.5 percent. Still, it’s estimated health care spending will account for a fifth of Minnesota’s economy by 2023. The 2013 figure was 13 percent. Some of the main drivers of future spending growth include price pressure from pharmaceuticals, as well as demographic shifts that result in growing numbers of older Minnesotans living with complex chronic diseases.
“It is good news that Minnesota’s health care spending grew more slowly than that of the nation as a whole in 2013,” said Minnesota Commissioner of Health Dr. Ed Ehlinger. “However, we cannot afford to treat our way to full health. We will face significant challenges related to health care costs unless we sharpen our focus on preventing costly chronic diseases.”
For the first time, a separate analysis identified drivers of private market spending on a more granular level. This analysis found that between 2011 and 2013, increases in prices were the primary driver of private insurance spending growth, while changes in service mix and volume of health care services played a smaller role.
“Growth in medical services’ prices has been the main culprit in both Minnesota and national spending trends as well,” said Stefan Gildemeister, MDH’s state health economist. “We expect the introduction of new pharmaceutical therapies with high treatment costs, layered on top of medical inflation in other sectors, to further fuel spending growth in the upcoming years.”
The MDH report is available here.
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